Will the Economic Advantage of Having Communities Friendly to Gays Tip the Political Balance in Favor of Legalizing Gay Marriage?

When a delegation from Charlotte, North Carolina visited Seattle recently, Steve Johnson, Director of Seattles Office of Economic Development, was asked to address the delegates on the topic of how to create and support a culture of creativity. Afterward, one member of the delegation asked Johnson how Charlotte should go about creating a welcoming environment for gay and lesbian entrepreneurs and workers.

Underlying the question was the recognition that in a world where economic success is increasingly driven by competition for talented people, an environment where all individuals feel free to be themselves is a distinct competitive advantage, Johnson wrote in a recent issue of The Indicator put out by the Office of Economic Development.

Johnsons insight, and the question from the North Carolina delegate, raises the question of whether the positive economic ramifications of marriage-equality legislation could begin to tip the national debate in favor of legalizing gay marriage.

Economist Chris Mefford discusses those issues in a recent issue of The Indicator.

ECONOMIC SPOTLIGHT

With guest columnist Chris Mefford

This month in the Economic Spotlight, Chris Mefford breaks down…

THE ECONOMIC BENEFITS OF EQUAL MARRIAGE RIGHTS

Washington State recently joined a small group of states in the U.S. with laws that support and formally recognize marriage for gay couples, a demographic which, in 2010, comprised roughly one in every 100 households in Washington State. Passage of a new law usually leads to discussion about its economic benefits, which in this case included attention from the University of California at Los Angeles, the United Kingdom, and others. Our local LGBT Chamber, The Greater Seattle Business Association, also points to the study from the UCLA Williams Institute, which maintains a wealth of data on LGBT demographics, estimates $88 million in spending from the law over the first three years.

Spending on marriage celebrations held in Washington may sometimes include money otherwise spent on other items and experiences, resulting in little or no real net impact. However, couples living in other states will come to Washington to marry, and in-state couples that would have gone out of the state to marry, but now will spend the money for the trip and the event within Washington. When other states pass similar laws, this economic advantage for Washington State will erode.

Researchers assert that communities where gay people feel comfortable tend to be communities with cultural assets that spur economic development and attract highly skilled and talented people. Richard Florida of the Creative Class Group prescribes the three T’s for economic development: Technology, Talent and Tolerance. In this case, the new law improves tolerance, improving environments to foster talent attraction and retention.

Reducing friction for families who make a life in Washington creates positive economic consequences. The law signals that many places within Washington may discriminate less against minorities. Content families tend to invest in their communities instead of spending in other more hospitable locales. In grander economic terms, this law will surely lead to productivity gains and private investment that would not occur in more oppressive living conditions. Local and state economies will benefit accordingly.